Intellectual Property in a Nutshell
Virtually every business involves “intellectual property.” As a small business owner, it is your job to understand what you have, so that you can protect it and maximize its value to your business. Here are the basics. Let’s use the example of a fictitious product — “Wiggins Widgets.”
1. Trademarks
A trademark includes any word, name, symbol, or device, or any combination, used, or intended to be used, in commerce to identify and distinguish the goods of one manufacturer or seller from goods manufactured or sold by others, and to indicate the source of the goods. In short, a trademark is a brand name. In our example, the trademark is the name “Wiggins.”
When used in connection with a service such a mark is called a service mark. In our example, if the company also provided widget repairs, the “Wiggins” name would be used to advertise this service. Rights in a trade mark or a service mark can be created either by use, or by use and registration with the state or federal government. Ultimately, however, the mark must be used in commerce. Until the mark is federally registered (if ever), the party using the mark should display the symbol ™ next to the trademark or service mark, to show the world that the owner claims rights in the mark. After federal registration is granted, the owner may use the symbol ® next to the mark. Federal registration has certain specific benefits to the owner, one of which is to potentially add to the value of the product by strongly identifying the source. Trademark protection lasts as long as the mark is in use.
- Copyrights
Copyright is a form of protection provided to the authors of “original works of authorship” including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished. The 1976 Copyright Act generally gives the owner of copyright the exclusive right to reproduce the copyrighted work, to prepare derivative works, to distribute copies or phonorecords of the copyrighted work, to perform the copyrighted work publicly, or to display the copyrighted work publicly.
Copyrights protect the expression of an idea (not the idea itself), and gives the owner the exclusive right to copy and license the work. In our example, Wiggins uses a distinctive label on its widgets packages. The copyrights that Wiggins obtained when it created this label prevents others from copying the description. Copyrights exist as soon as a work is created, and can include words, images, sounds, or any original work reduced to a tangible medium. Copyright can also be claimed through federal registration, pursuant to specific procedures administered by the Office of Copyrights: there is no state copyright law. The use of the symbol © [name of author, year] indicates a claim of copyright. The duration of a copyright is the life of the author plus 50 years. To show copyright infringement, the owner must show copying: Copyright does not protect against the independent creation of the work by a third party. Photocopying and unauthorized use of copyrighted software and music are two major areas of copyright infringement.
- Patents
A patent for an invention is the grant of a property right to the inventor, issued by the U.S. Patent and Trademark Office. In our case, the Wiggins Widget company obtained a patent for its widget, based on its unique functionality. The term of a new patent is 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed, subject to the payment of maintenance fees. US patent grants are effective only within the US, US territories, and US possessions.
The right conferred by the patent grant is, in the language of the statute and of the grant itself, “the right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States. What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention.
A patent is obtained by filing a patent application, multiple drawings and a technical statement with the U.S. Patent and Trademark Office, where an examiner compares the invention with known references, or “prior art” to determine whether the invention is in fact original. The words “patent pending” may used while the application is in process. A patent prohibits any unauthorized manufacture, use or sale of the devices or processes embodying the invention — even if innocently infringed, independently discovered or discovered by reverse engineering.4.
4. Company Names
A company is required to select and register a name with the state when it is formed. Company names are granted by the state on a first come, first served basis. This is the name by which the company is known to the state and, perhaps, the public. In our example, the owners of our fictitious company formed a legal entity known as “Wiggins Widgets Incorporated.” This use of “Wiggins” is separate and apart from the trademark use of “Wiggins” on products (see Section 1 above) or the use of “Wiggins” in any copyrighted labeling (See section 2 above).
- Domain Names
A domain name is a designation assigned to a particular web address by the Internet Corporation for Assigned Names and Numbers (ICANN), a private organization formed in 1998 for the purpose of administering all of the world’s website names. In our example, Wiggins Widgets, Incorporated (See Section 4 above) has registered the domain http://www.wigginswidgets.com. This use of “Wiggins” is technically separate and apart from its use as a trademark, copyright, or company name. However, in certain instances, the existence of a site can impact the existence (or lack thereof) of a trademark.